Inequalities of wealth distribution in a conservative economy

TL;DR

This paper studies a conservative economic model where wealth distribution self-organizes into a state with a minimum wealth threshold, resulting in low inequality and a stable wealth distribution resembling that of welfare states.

Contribution

It introduces a conservative market model with minimum dynamics that leads to a stable wealth distribution with a poverty line and low Gini index, resembling real-world welfare states.

Findings

Wealth distribution develops a minimum threshold after a transient period.

The system self-organizes into a critical state with low inequality.

The model's wealth distribution resembles that of welfare states like Sweden.

Abstract

We analyze a conservative market model for the competition among economic agents in a close society. A minimum dynamics ensures that the poorest agent has a chance to improve its economic welfare. After a transient, the system self-organizes into a critical state where the wealth distribution have a minimum threshold, with almost no agent below this poverty line, also, very few extremely rich agents are stable in time. Above the poverty line the distribution follows an exponential behavior. The local solution exhibits a low Gini index, while the mean field solution of the model generates a wealth distribution similar to welfare states like Sweden.